Mercury purchased 60 million shares in Venus on 1 July 2019. On that date, the retained earnings of Venus were 27,500,000. Venus has not issued any new shares since the acquisition. On 1 July 2019, the fair value of Venus' land was calculated to be 15,000,000 and the carrying value of this land on Venus's accounts was 12,000,000. The land has not subsequently been revalued in the financial statements of Venus and land is not depreciated. There were no other differences between the book value and the fair value of the assets and liabilities of Venus at the date of acquisition. The Statements of Financial Position of Mercury and Venus as at 30 September 2020 are as follows: Notes: 1) During the year ended 30 September 2020, Mercury sold 30 million units of product to Venus at 2 per unit. The total cost of the 30 million units was 45,000,000. Of these items, 20 million units have been sold onwards to customers outside of the Group during the year and the remaining units were still in the inventories of Venus at year end. 2) On 30 September 2020, Mercury had a trade receivables balance of 2,600,000 due from Venus. On 28 September 2020, Venus sent a cheque for 1,500,000 to Mercury that was not received until 2 October 2020. 3) The management of Mercury estimated that the fair value of goodwill in Venus at 30 September 2020 was 28,000,000. 4) It is the group policy to value non-controlling interest using the proportionate share of net assets method. a. Prepare the Mercury Group Consolidated Statement of Financial Position as at 30 September 2020 (15 marks) b. During the Annual General Meeting (AGM), a group of Mercury's shareholders expressed concern regarding the amount of consideration paid by Mercury for the acquisition of its share in Venus. They claimed that Mercury acquired part of Venus, but the amount paid is higher than the acquired share of Venus' net assets on the balance sheet at acquisition'. The shareholders have asked the management of Mercury to explain the rationale for the amount paid. Write a response to the concern raised by the shareholders, including a discussion on the appropriateness of the balance sheet for measuring company value, an explanation of the concept of goodwill, and using the figures from the question to illustrate your points. (7 marks)